Share Buybacks Done Properly

One of the biggest problems that can arise in a sale of a company is an historic buyback of shares not being carried out correctly.

Not complying with strict company law requirements can cause a share buyback to be void and those shares to remain held legally by that individual. One common mistake is the purchase price being paid in instalments incorrectly.

Problems with a buyback need to be carefully evaluated and it considered how (if possible) it can be rectified. This can significantly delay a future company sale timetable and, if the risk is too large (as it relates to the ownership of the company), that sale may fall through.

The last thing a seller wants when in the middle of a deal to sell their business is to be revisiting a buyback which they thought bought out their former co-owner and to be told there may be problems with the share ownership.

Does that problem mean that subsequent shareholder decisions did not have enough votes to pass, that dividends should have been paid differently and/or that offences have been committed?

I can assist if you are considering a share buyback and want to make sure that it is structured correctly. Instructing an expert can give you the peace of mind that you will not have these issues.

If you are concerned that there may be problems with a previous share buyback then I may be able to review this for you.

Please feel free to get in contact to see how I might be able to help on 07359 989311 or at Robert.Flannagan@acuitylaw.com.